Vintage Energy (ASX: VEN), a company listed in 2018 to take advantage of the eastern Australia gas crisis, will begin testing its ground in the onshore Otway Basin and the Cooper Basin in the coming weeks following COVID-19 delays being resolved.
Vintage has interests in the Cooper/Eromanga, Otway, Galilee, Perth and Bonaparte basins.
The company was created by two former executives of Beach Energy (ASX: BPT) — Reg Nelson, who was managing director at Beach and Neil Gibbins who was the chief operating officer.
The energy crisis on Australia’s eastern seaboard, and the natural gas supply crisis, were the catalysts for the formation of Vintage.
The company states that the oil potential in prominent onshore basins is also a key focus, particularly given the experience of Vintage Energy team members in discovering and developing oil fields on the western flank of the Cooper-Eromanga Basins in South Australia.
Vintage, which holds 50% of PEL 155 in the Otway Basin in partnership with a non-listed company as operator, says that all the equipment for the testing of Nangwarry-1 is in the final stages of being mobilised to site.
The company was advised by the operator that COVID-19 restrictions at the South Australia-Victoria border had delayed arrival of the rig, but these problems have now been resolved.
Target is food grade carbon dioxide
“High quality” carbon dioxide (CO2) was discovered at PEL 155 last year with near term production and sales the target. Aa preliminary agreement has been signed with an offtake company, Supagas.
The upcoming production test will include a short test of the mid-Pretty Hill sandstone to verify earlier gas flows.
Vintage says the production test is a key milestone on the path to production of food grade CO2.
If successful in confirming saleable quantities, the test will allow the joint venture partners to consider appropriate debt funding options.
The co-produced methane will be used to run the planned production plant.
Supagas has already commissioned preliminary design work for the plant.
Test will follow up earlier gas find
In the Cooper Basin, where Vintage is the operator, its partners include Metgasco (ASX: MEL) and Beach Energy, a rig has been signed to drill two wells, Vali-2 and Odin-1, with an option for a third well.
A gas discovery was made at Vali-1.
Vali-2 will be drilled in April and take about three weeks to reach total depth, with the rig then moved to Odein-1 in South Australia.
Vali-2 will allow appraisal of the extent of the formation gas accumulation found by the first well.
Odin-1 is being drilled to test a large fault up dip of a hole sunk in 1987, but which was plugged and abandoned after discovering non-commercial hydrocarbons.